Cambridge A Level Business (for first examination in 2016) 9609 — 2023 Oct/Nov Paper 4 · Variant 1

1 Evaluate PV’s marketing strategy between 2012 and 2021. [20]

Mark scheme: Question Answer Marks 1 Evaluate PV’s marketing strategy between 2012 and 2021. 20 Level AO1 Knowledge and AO2 Application AO3 Analysis AO4 Evaluation understanding 3 marks 2 marks 8 marks 7 marks 3 7–8 marks 6–7 marks Developed analysis of Effective evaluation the overall strategy A developed that identifies judgement/conclusion is made in connections between the business context that draws causes, impacts and/or together developed evaluative consequences. comments which balance some key arguments in the business context. 2 2–3 marks 2 marks 4–6 marks 3–5 marks Developed knowledge Developed application Developed analysis of Developed evaluation of relevant key term(s) of relevant point(s) to individual strategic • A developed and/or factor(s) is used the business context. element(s) that judgement/conclusion is to answer the question. identifies connections made. between causes, • Developed evaluative impacts and/or comments which balance consequences. some key arguments. 1 1 mark 1 mark 1–3 marks 1–2 marks Limited knowledge of Limited application of Limited analysis that Limited evaluation relevant key term(s) relevant point(s) to the identifies connections • A judgement/conclusion is and/or factor(s) is used business context. between causes, made with limited supporting to answer the question. impacts and/or comment/evidence. consequences. • An attempt is made to balance the arguments. 0 0 marks 0 marks 0 marks 0 marks No creditable response. No creditable response. No creditable response. No creditable response. 1 Indicative content: AO1 Knowledge and understanding No other AO2, AO3 or AO4 marks can be awarded without AO1. Candidates must show knowledge and understanding, they cannot just mention a key term. • Strategy – A plan of action to achieve a long term aim. • Marketing – the act of promoting and selling products and services. • The contents of a marketing plan: objectives, resources, research, marketing mix (price, product, place, promotion). AO2 Application Candidates must apply their answers to marketing and marketing strategy. • Strong brand identity begins in 2012 with rare old cars. • Promotion in specialist magazines is used which changes objective to profit maximisation. • Pricing method later changes to skimming. • Use of TV restoration programme to raise brand awareness in 2015–16 leading to increased brand awareness worldwide. • Use of website and social media to gain customers, brand awareness and sales. • Sponsorship of Formula 2 team to raise brand awareness 2018–2021. AO3 Analysis Candidates need to identify an element of the marketing strategy and provide developed analysis to get to A2, this then needs to be counterbalanced to get to A3. If a candidate does this twice, they will gain 8 marks. • A strategy to sell rare old cars in the niche market led to increased brand awareness. [A2] This brand awareness must have been high to attract the interest of a TV company which further developed the brand image. However, this will require specialist marketing to reach the niche. [A3] • The marketing focus changes again to increasing brand awareness with the TV programme. This shows that PV is responsive to marketing opportunities and objectives can be fluid. [A2] But relies on product placement rather than direct advertising which may take longer to improve sales. [A3] 1 • The sponsorship of FAST continues to focus on brand awareness through an international platform. [A2] However, the sponsorship may not fit with the branding strategy as although costs are increasing by $2m per year, the sponsored team is not providing the success necessary to increase or strengthen the brand image which leads to the marketing being abandoned. [A3] AO4 Evaluation Candidates MUST answer the question – a judgement on the strategy between 2012 and 2021. The development and support of this judgement will help them to move through N2 and N3. To award N3 the answer must be in context and draw upon the previous analysis. Evaluation will largely depend on the points raised in the analysis of the marketing strategy of PV. • Overall judgement required on the balance between strengths and weaknesses of PV’s approach to its marketing strategy. [N1] • The lack of a formal marketing plan suggests that PV is opportunist, and the approach is based on opportunity rather than a considered marketing strategy. Sales had stalled in 2017 and seemed to struggle to increase indicating the strategy had not worked. • The TV programme was an effective and low-cost advertising method as the programme paid for filming, editing and managing the tv schedule which met the marketing strategy and objectives at the time. This also led to alternative revenue streams which suggests that the strategy to allow filming was successful. • The sponsorship deal, while it could have been lucrative, was reliant on the FAST team who did not perform by 2020–21 – possibly impacting sales while the costs grew to $4m. Accept all valid responses.

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2 Advise Jimmy on the extent to which external influences will impact on the success of PV’s future business strategy. [20]

Mark scheme: 2 Advise Jimmy on the extent to which external influences will impact on the success of PV’s future business 20 strategy. Level AO1 Knowledge and AO2 Application AO3 Analysis AO4 Evaluation understanding 3 marks 2 marks 8 marks 7 marks 3 7–8 marks 6–7 marks Developed analysis of Effective evaluation the overall strategy that A developed judgement/conclusion identifies connections is made in the business context between causes, impacts that draws together developed and/or consequences. evaluative comments which balance some key arguments in the business context. 2 2–3 marks 2 marks 4–6 marks 3–5 marks Developed knowledge Developed application Developed analysis of Developed evaluation of relevant key term(s) of relevant point(s) to the individual strategic • A developed and/or factor(s) is used business context. element(s) that identifies judgement/conclusion is made. to answer the question. connections between • Developed evaluative causes, impacts and/or comments which balance consequences. some key arguments. 1 1 mark 1 mark 1–3 marks 1–2 marks Limited knowledge of Limited application of Limited analysis that Limited evaluation relevant key term(s) relevant point(s) to the identifies connections • A judgement/conclusion is and/or factor(s) is used business context. between causes, impacts made with limited supporting to answer the question. and/or consequences. comment/evidence. • An attempt is made to balance the arguments. 0 0 marks 0 marks 0 marks 0 marks No creditable response. No creditable response. No creditable response. No creditable response. 2 Indicative content: AO1 Knowledge and understanding No other AO2, AO3 or AO4 marks can be awarded without AO1. Candidates must show knowledge and understanding, they cannot just mention a key term. External influences on business activity: • Political and legal • Economic • Social and demographic • Technological • Competitors and suppliers • Environmental • SWOT • PEST AO2 Application Candidates MUST apply this to external factors – mainly listed in Appendix 4. • Political – global agreement to reduce carbon emissions/low investment into electric vehicle charging infrastructure. • Economic – fastest rising disposable incomes in the 18–30 range. • Social – growing consumer interest in sustainable production methods. • Technological – advances in battery technology will reduce future cost of electric vehicles. • Legal – rising congestion charges and banning of petrol vehicles in some major cities. • Candidates can use information from the appendices as long as its references in context of external influences. 2 AO3 Analysis Candidates need to identify an external factor and provide developed analysis to get to A2, this then needs to be counterbalanced to get to A3. If a candidate does this twice, they will gain 8 marks. • Political and legal influences may leave Jimmy with no choice as environmental laws change. [A1] Making the switch to electric powered vehicles now means he may gain first mover advantage and increased marketing EoS. [A2] However, as electric vehicles are still relatively new, the laws may evolve, meaning that any skills developed now may be irrelevant in the future. [A3] • Economic influences may force Jimmy to change as customers demand more electric and less petrol vehicles. [A1] As the tools and equipment are expensive and specialist then it may be important to start planning early to ensure that costs can be properly budgeted. [A2] However, as the technology is relatively new, costs are still high which means that the gearing ratio of 75% of PV may not be able to support the investment. [A3] • Social and demographic influences may be important as pressure groups and online communications can quickly target businesses that are not seen to be acting sustainably creating negative publicity for promoting polluting vehicles. [A2] However, the target market of males aged 45–60 for Formula 2 may not be that interested in following popular trends and may withdraw custom to suppliers who continue offering petrol services. [A3] • Technology is changing at a fast pace and even petrol engines now need substantial technological knowledge to perform. [A1] Investing in the newest technology may allow PV to keep ahead of the marketing curve and gain further marketing EoS. [A2] However PV needs to consider whether leasing or purchasing the newer technology is most suitable given the pace of change. [A3] • Competitors and suppliers may erode PV’s market share as they adopt new technologies. [A1] This may lead to PV becoming more niche, reducing their brand image and competitiveness. [A2] However, as PV’s model has changed from quantity of customers to quality, this may not matter a great deal. [A3] • The growing importance of sustainability may mean the environmental influences may impact on the ability of PV to promote and produce its products. [A2] However PV may be able to utilise the reuse of classic cars as an environmentally friendly way of ensuring that older cars are recycled rather than being sent to scrap. [A3] 2 AO4 Evaluation Candidates MUST answer the question – the extent to which external influences can impact on PV’s future. The development and support of this judgement will help them to move through N2 and N3. To award N3 the answer must be in context and draw upon the previous analysis. Evaluation will largely depend on the points raised in the analysis of the external factors of PV. • The dynamic external environment – to what extent will this affect Jimmy’s core customer base? Should he do more research into their long-term requirements? • PV restores old cars – only new cars have to be electric so does political/legal really impact his market/niche? • Economic environment – how exposed are they? Gearing is high so changes in interest rates or economy could impact heavily on PV’s plans. Depends upon how likely rates are going to change and impact on consumers incomes. • Social – depends on level of demand from key market segments – will old cars be more popular with older customers who don’t care about cars being converted to electric vehicles. In the short term will this target the younger generation who want retro cars ready for the modern electric world? • Tech is constantly changing; will the new investor bring specialism in this area to help keep costs down? • Will it depend on the competition and their plans? How niche would PV become? • If PV does nothing how much will it come under pressure from the environmental lobby? How important is the environment to PV and the new venture capitalist? • Candidates can contrast with internal factors but only as a form of evaluation i.e. external factors are not as important because these internal factors will have a bigger impact… Accept all valid responses.

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